Nishat Group Companies and Associates (Nishat) has arranged over Rs 540 million through its subsidiaries for the construction of 20 megawatts solar power project at $31.2 million in Punjab. The grid-connected photovoltaic (PV) modules solar power plant would be developed by Nishat, having submitted an Expression of Interest to Punjab Power Development Board, at Mehmood Kot of District Muzaffargarh under the revised Punjab Power Generation Policy 2009.
Incorporated on November 19 last year, Lalpir Solar Power, a wholly-owned subsidiary of Nishat Power Limited (NPL), would be building, owning, operating and maintaining or investing in the project. With its notional cost estimated at $1.56 million per megawatt, the alternative energy venture''s financing is based on 75 percent debt and 25 percent equity.
"The equity will be apportioned in terms of joint venture agreement executed among consortium members," said Khalid Mahmood Chohan, Nishat''s company secretary, in a stock filing Wednesday. Tuesday saw the Boards of Directors of Lalpir Power Limited and Pakgen Power Limited, members of the Nishat consortium, allowing their respective company managements to invest Rs 270.27 million each in the shares of Lalpir Solar.
The authorised investment would be made "by way of acquisition", from time to time in a three-year period, of 27.027 million ordinary shares of the targeted firm each at a face value of Rs 10. Also, the board has allowed Lalpir Power to extend a loan of up to Rs 1 billion to Pakgen Power as running finance facility when required by the latter. As a separate stock filing shows, Pakgen Power is supposed to further lend this Rs 1 billion financing to Lalpir Solar as and when required by it. "The return on such running finance shall be equivalent to the average borrowing cost of the company for each month with minimum rate of one month KIBOR + 0.50 percent," Chohan said.
The loan in question, he said, shall be for a renewable period of one year. In a statement under Section 160(i)(b) of the Companies Ordinance 1984, the secretary said NPL shall be the main sponsor of the project with equity stake of 34 percent finally.
NPL would be entitled to hold, until the sixth anniversary of successful commissioning of the project, not less than 20 percent of the total issued and paid up share capital of Lalpir Solar. The consortium members shall collectively hold at least 51 percent of the total issued and paid up share capital of Lalpir Solar until the sixth anniversary of successful commissioning of the project, he said. "The directors have carried out their due diligence for the proposed investment," he said.
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